Universities, financial services providers and professionals will be big ­beneficiaries of the new Japan ­economic relationship which gives Australian interests equal or better provisions than other Japanese trade deals.

While most of the focus so far has been on reducing many agricultural tariffs and cheaper cars in Australia, services industry representatives say the economic partnership agreement (EPA) deals open the way for Japan to move up from being Australia’s sixth largest services market. “We anticipate that the conditions in the EPA will be a strong catalyst specifically for better trade outcomes in financial services, education and professional services," said Australian Services Roundtable president
James Bond
.

The agreement goes beyond Japan’s commitments to Australia under the World Trade Organisation and contains potentially valuable commitments on mutual recognition of professional qualifications.

Sir Rod Eddington – one of Australia’s most experienced businessmen in Asia – said he was pleased that the bilateral deal includes a large chapter on services access.

“We are very good at funds management, universities, we’ve got some great tourism assets and good people in that space," he told The Australian Financial Review. “I think it’s really important to not just focus on resources and agriculture – as important as they are – and recognise that services are an important part of our economy and an important export opportunity."

Rio Tinto chief executive
Sam Walsh
said that liberalised trade arrangements with Japan would give Australian companies access to technology and innovation and cement trust between both countries.

While the Japan-Australia Economic Partnership Agreement would not materially benefit Rio Tinto, Mr Walsh said closer economic ties to Japan made it easier for all firms to do business between the countries.

“It’s more about freeing up the markets, freeing up the systems and the mechanisms that allow trade to ­happen," he said.

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Joseph Healy
,
National Australia Bank
business bank group executive described the deal as a “huge ­opportunity for Australian business" that would generate benefits for decades. “With Australia perfectly positioned to respond to the projected growth in demand from Asia over the coming years, particularly in agriculture, resources, healthcare, education and professional services, this is exactly the sort of message we should be sending to the region."

While applauding the deal, Sir Rod cautioned that Japanese investors looking to invest here would still be looking for political certainty, action on carbon and control over construction costs.

“They are the things that matter to them and they are the things that matter to us," Sir Rod said as the deal was being signed in Canberra.

The former chairman of Infrastructure Australia said Japanese investors had expressed confidence those challenges would be resolved. “Japanese companies have been doing business in Australia for a very long time . . . they know Australia really well," he said. “But the things they will look for are the things that any investor will look for – regulatory certainty, political stability, certainty around construction costs for greenfield projects."

The China question

Sir Rod – who spent almost two ­decades working in Asia – down-played concern the deal with Japan would offend China.

“For Australia it’s not about having a good relationship with Japan or China, it’s about having a good relationship with Japan and China," he said.

He also drew confidence from Prime Minister
Tony Abbott
’s statement about the region that “we either prosper together or none of us prosper".

“The Chinese will speak for themselves, but it’s difficult to disagree with the premise that the rule of law should prevail," Sir Rod said. “We all have a vested interest in a strong relationship."

Sir Rod cast aside concerns among some strategic analysts that tensions across the region resemble Europe in the lead-up to World War One.

“I think a big difference between now and 100 years ago is the people-to-people links," he said, pointing to the fact that hundreds of thousands of people travel between nations across the region.

“The people-to-people links are an essential part of building trust between nations because economic success requires peace and peace requires trust." However, he acknowledged that it was vital that relationships in the region weren’t taken for granted.

“You have to continually reinvest in them. [And] you’ve got to have ­mechanisms to defuse flash-points if they do occur."

Financial services providers will be able to do business on a “cross-border" basis,enabling them to work without the need to open a full commercial ­presence.This includes trade in ­wholesale securities transactions, investment advice and portfolio ­management services.

Financial Services Council chief executive
John Brogden
said: “Australian financial services providers will benefit from commitments made by Japan which will guarantee cross-border access for Australian funds ­managers providing investment advice, portfolio management services and trade in wholesale securities ­transactions".

Japan has guaranteed market access for Australian education institutions including vocational and technical ­education. Japanese students will be able to study in Australia using ­Japanese funded students loans ­making Australian education more ­attractive.

Australian law firms will be able to form legal professional corporations under Japanese law and Australian lawyers residing in Japan are able to take advantage of expedited ­registration procedures to provide Australian and international legal services.